Expert Source: Dow Dives and Rallies

By Jacqueline Ghosen

BUFFALO, N.Y. -- It is not terribly surprising to see jumps in
prices in either direction, says Christian Tiu, professor of
finance at the University at Buffalo School of Management. "With
volatility that high, we can see big swings in prices -- much like
the one at this morning's open."

What causes this volatility in the markets? "Simply put, it's
the lack of certainty on where the economy is going. Tiu says. "For
example, will the European Union survive in the current form? And
how large the U.S. exposure is to the EU? When will we see
inflation rising in the U.S.? How will the new financial reform
affect the markets? Will the real estate markets recover by the
time when commercial mortgages are due to refinance in
2012-15?"

These are all questions without an answer, Tiu points out.
"Traders guess, but their guesses are widely different, sending the
stocks in the roller coasters we see."